CEO SUMMARY: This year the interesting trend at the AACC’s exhibit hall was modular laboratory automation. That’s a big change from the total laboratory automation solutions touted in past years. But watch out! The economics of this equipment have yet to be validated. It was also clear that another coming trend is the globalization of clinical laboratory services.
DURING THE WEEK OF AUGUST 3-7, the American Association of Clinical Chemistry (AACC) held its annual convention in Chicago. The scale of this program is immense. More than 18,000 people attended, of which 20% were from other countries.
Despite the reduction in the number of laboratory sites in the United States and consolidation in the diagnostics industry, a record number of exhibitors showed up in Chicago. There were 530 exhibitors and 1,400 booths. At least 130 exhibitors were at AACC for the first time.
THE DARK REPORT was invited to attend a number of special functions during convention week. Most were “off-the-record” background briefings, but all contained a wealth of useful intelligence about future directions for the clinical laboratory marketplace.
There are two key observations for our clients and readers. First, the AACC convention is physical evidence that a globalization of clinical laboratory services and organizations is in its infant stage. Diagnostics vendors from Asia and Europe were highly visible, as were attendees from a multitude of countries around the world.
Further evidence of this globalization trend was confirmation during conference week that several leading laboratory organizations in the United States are actively marketing their laboratory testing services in foreign countries. Of equal interest, the strategy of at least one major laboratory organization is to purchase and operate clinical laboratories in other countries. This lab has already completed several overseas acquisitions.
The globalization of lab services will have positive effects for the laboratory industry in the United States, as it opens new revenue sources for both clinical laboratories and diagnostics companies based here in the U.S.
Second, if actions speak louder than words, then total laboratory automation (TLA) is a non-issue at this stage in its development curve.
The reason? Vendors were willing to talk about TLA, but their time and money has been invested in developing automated instrument modules and work cells. These were the products which garnered the most hoopla and attention.
It seemed that every diagnostics vendor capable of designing such a system had done so, exhibiting clusters of instruments formed together into self contained automated work modules. But are these instruments ready for market? And were attendees buying?
No To Both Questions
It seemed that the answer was no to both questions. Of the advanced automated instrument modules displayed, few are actually ready for sale and immediate delivery.
One perceptive attendee commented, “I am hearing release dates as far out as third quarter 1999. Even if I put cash on the barrelhead today, my laboratory would have to wait for months before most of the advanced modular automation work cells I’m interested in could be installed and working in my laboratory.”
Her comment was consistent with the information gained by THE DARK REPORT in visiting exhibits and speaking with other attendees. It led us to make a comparison. The software industry has a term for companies which announce new software products, with a release date far in the future (and which may never be achieved). That term is “vaporware.”
Described As “Autoware”
So what would be the term for an automated modular workstation, which currently exists only as a manufacturing prototype and won’t be available until some specified point in the future? Some wags in our group coined the term “autoware.”
If the metaphor is valid, then diagnostics vendors displayed their particular brand of “autoware”–prototype automated laboratory instrument modules which are not yet ready for operation in a clinical laboratory. That should be a caveat to those laboratory administrators pondering whether to purchase this upcoming generation of unproven automated instrument modules.
As with total laboratory automation, this technology needs to undergo further development and refinement before it demonstrates a clear-cut effectiveness over current technology. Our recommendation is that laboratory executives who want to be early adopters of this generation of laboratory automation modules should get a performance guarantee from their vendor.
“Even if I put cash on the barrelhead today, my laboratory would have to wait for months before most of the advanced modular automation stations I’m interested in could be installed and working in my
After all, if the vendor is convinced this generation of its product can deliver economic and productivity improvements, then it should stand behind that belief. Such a contract would be winwin for both parties.
During the next 12 months, THE DARK REPORT expects that laboratory executives will find a steady stream of instrument vendors offering this first generation of laboratory automation modules. The obvious evidence supporting this prediction was the money and effort invested by diagnostic companies to launch these products at the AACC convention. Expect similar exhibits, although on a smaller scale, at CLMA’s convention this week in Philadelphia.
Just as 1996-97 was the year for marketing automated cytology systems to the laboratory industry, so also will 1998-99 be the year for marketing automated laboratory modules.